The rise and rise of the aggregator

Rick Slater, General manager, CDL

Another day, another price comparison site - or so it may seem to many in the industry. Recent months have seen activity in the aggregator sector reach fever pitch, with the likes of BeatThatQuote, Go Compare and U-Switch launching to join established players such as Moneysupermarket, Confused and CompareTheMarket. In the CDL community alone, March 2007 saw almost three million quotes completed via CDL's internet infrastructure - a 50% rise from the two million two months earlier.

The benefits to the consumer are well versed but the benefits to intermediaries have been more hotly disputed. Many have voiced concerns that aggregators are accelerating the commoditisation of motor insurance, encouraging consumers to focus on lowest price rather than best value.

Despite these misgivings, many intermediaries recognise that this route to market has significant advantages. Andrew Lee, chief executive of The OutRight Company, points out that while it is critical to be among the cheapest quote providers, it is not necessary to be the cheapest, depending on what information the enquirer can glean. Lowest prices often indicate higher than average excesses, so there is increasing pressure on aggregators to include key policy features to ensure that consumers can compare like with like - and identify the policy that best meets their needs.

Ultimately, intermediaries are best placed to benefit if they have the right technology in place to support the volumes of traffic and allow real time follow up - and if they are able to negotiate a favourable contractual structure with aggregators.

CDL's aggregator module ensures that risk data is fired from the aggregators to the software house, then routed directly to the intermediary's back office where the quotation is generated. This facility allows the most competitive brokers to retrieve quotes that were not fulfilled online and promptly follow up with a telephone call. According to Jon Morrell, deputy managing director of Direct Choice, this can make a significant difference to conversion rates - allowing the operator to apply broking knowledge in a scenario where the intermediary is usually kept at arm's length from the customer.

Aggregators undeniably offer the intermediary a staggering volume of leads. Moreover, with pockets deep enough to fund consumer marketing campaigns that many intermediaries could not even begin to contemplate, aggregators allow them to associate with some of the most powerful brands in the industry.

While highly specialised intermediaries, or those with a strong brand of their own may choose to go it alone, for most intermediaries, ignoring aggregators as an online route to market is simply not an option.